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Predicting asset prices thanks to sentiment analysis
An asset price is simply the value of a financial asset, such as a stock or bond, at a given point in time. The sentiment score of a corporation or business idea is based on positive or negative news articles about that company or idea. So, when we’re looking at the relationship between asset prices and sentiment scores, we’re really just looking at how positive or negative news affects the value of a financial asset.
In this article, I specifically explore the relationship between bitcoin price and positive or negative news about bitcoin. I found that there is a correlation between the two variables. When positive news about bitcoin was published, the price of bitcoin increased, and when negative news about bitcoin was published, the price of bitcoin decreased. This suggests that news sentiment has an impact on asset prices. However, it’s important to note that this relationship is not always linear. There are times when news sentiment will have little to no effect on asset prices, and other times when news sentiment will have a large impact on asset prices. Overall, however, it seems that news sentiment does play a role in shaping asset prices.
